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03Aug2017 Pre-Market Commentary: Wall Street Flat Ahead Of The ISM Report, WTI Crude Trading In The High 49 Handle, DOW Is Up 20 Percent Since Election Day

Written by Gary

US stock market indexes are flat ahead of the ISM report due out at 10 am (SPY -0.06%). This mornings economic reports will have an effect on the markets, one way or another.


Here is the current market situation from CNN Money

European markets are mixed today. The FTSE 100 is up 0.69% while the CAC 40 gains 0.26%. The DAX is off 0.31%.

What Is Moving the Markets

Here are the headlines moving the markets.

European shares rally, sterling tumbles on dovish BoE

LONDON (Reuters) - Upbeat economic news helped push European stock markets higher on Thursday, while sterling hit a nine-month low against the euro after investors concluded the Bank of England was in no hurry to raise interest rates.

U.S. planned layoffs fall; hiring picks up in July: Challenger

NEW YORK (Reuters) - The number of planned layoffs at U.S. companies dropped in July to its lowest since November while job-opening announcements notched up, a sign that businesses are confident that the economy will continue to expand, a report released Thursday showed.

Model 3 demand, higher revenue propel Tesla shares higher

SAN FRANCISCO (Reuters) - Tesla Inc reported quarterly revenue that doubled on Wednesday and a loss that was the electric car maker's largest ever, but its shares rose after revealing more than 1,800 daily reservations for the Model 3 and predicting increased Model S deliveries in the second half of 2017.

Amazon's Hollywood spending soars, returns unclear

SAN FRANCISCO (Reuters) - Amazon.com Inc is quickly ramping up the billions of dollars a year it spends on creating and licensing TV shows and films, signaling the retailer plans to be in show business for the long haul.

EU sends charge sheet to Visa over inter-regional fees

BRUSSELS (Reuters) - The European Commission said on Thursday it had sent a charge sheet to credit card group Visa over the fees merchants have to pay when customers from outside the bloc make purchases in the European Union.

Dish misses profit expectations, but limits subscriber losses

(Reuters) - Dish Network Corp on Thursday reported quarterly results that missed analysts' estimates, but the satellite television provider lost fewer subscribers than expected.

Yum Brands comp sales miss as Pizza Hut continues to struggle

(Reuters) - Yum Brands Inc , the owner of KFC and Taco Bell, reported a smaller-than-expected rise in quarterly sales at established restaurants worldwide as fewer diners ate at its Pizza Hut restaurants.

Corporate profits to take more hits from Ukraine cyber attack

TORONTO/FRANKFURT (Reuters) - The cyber attack that crippled Ukraine businesses and spread worldwide to shut down shipping ports, factories and corporate offices has taken a costly toll on the results of major U.S. and European companies in the latest quarter, with more to come.

Avon CEO Sheri McCoy to step down following activist pressure

(Reuters) - Cosmetics maker Avon Products Inc , which has been under pressure from activist investor Barington Capital, said on Thursday Sheri McCoy will step down as chief executive in March next year.

"This Doesn't Just Happen" - Trump Crows Of Stock Market, Business Hope Highs

It appears the new 'narrative' from The White House is simple - keep distracting from the failures of massive policy reforms, and focus on the stock market and soft-survey hype.

President Trump's opening tweets this morning keep the story going....

Business is looking better than ever with business enthusiasm at record levels. Stock Market at an all-time high. That doesn't just happen!

— Donald J. Trump (@realDonaldTrump) August 3, 2017

But, as we noted yesterday, "business" doing well may not mean what he hopes it does... (as we noted previously). With corporate profits rising rapidly in recent years, this has been almost exclusively at the expense of wages and compensation. This is shown in the chart below, which shows that while the profit share of GDP has stabilized over the past quarter, labor Share of GDP is at an all time low, and has fallen further in recent periods. And while labor share of GDP may increase as wages (finally) grow rises, increased capex, especially into productive assets, will limit this growth.

The chart is especially troubling for Trump because it was the collapse in the labor share of GDP that prompted the populist revulsion against the status quo, and got Trump elected in the first place. Should Trump wish to cheer the ...

Frontrunning: August 3



Bank of England, staying on hold, hints again at 2018 rise (Reuters)

Angry and inspired: Democrats train new wave of candidates (Reuters)

Is Gary Cohn a Good Pick to Head the Fed? (BBG)

Russia Warns of Worsening U.S. Ties, Criticizes Trump 'Weakness' (BBG)

Russians Portray Washington as Mired in Chaos (WSJ)

Japan PM names safe hands in cabinet reshuffle but makes maverick top diplomat (Reuters)

Avon CEO to Step Down Amid Activist Investor Pressure (WSJ)

Trump, frustrated by Afghan war, suggests firing U.S. commander (Reuters)

'London Whale' Has a New Target: J.P. Morgan (WSJ)

As Venezuela Spirals, U.S. Oil Confronts a $10 Billion Threat (BBG)

Commodity Firms Reap Rewards of Bond Upgrades (WSJ)

The Oil Market's Hidden Signals Show U.S. Producers Are Hedging Again (

Gold Coins and Bars See Demand Rise of 11% in H2, 2017

Gold Coins and Bars See Demand Rise of 11% in H2, 2017

- Gold coins, bars see demand rise of 11% in H2, 2017 to 532 tonnes according to WGC Gold Demand Trends
- Gold investment demand strong in China, India & Turkey
- Demand in Turkey surges on double digit inflation
- Total gold demand declines in Q2 on slower U.S. ETF inflows
- Gold held in ETFs in Europe reached all time high of 978t
- U.S. ETF inflows slowed from last year's record
- Central banks continue to buy - 94t of declared purchases
- Turkey joined Kazakhstan & Russia in buying gold
- Well balanced market: ETF inflows continue and jewellery, technology and bar & coin demand up
- Important to note this is all official, transparent and recorded demand. There is demand and flows of gold that cannot be and are not recorded - especially into the Middle East, India, Russia and of course China

Thank the Foreigners for Dow 22000

Americans cheering the U.S. stock market's latest milestone should pause to thank the rest of the world for making it possible.

Cash Gets More Precious at Tesla

The electric-car maker will have a tough task to get to a profitable future.

New CEO Needs to Solve AIG's Old Problems

Insurer wants to boost growth but needs to address high losses in commercial insurance first.

MarketWatch First Take: Tesla is a large public company, and Elon Musk must start acting like it

Elon Musk is the chief executive of a public company worth $53 billion and counting, but at many points in Tesla Inc.'s earnings conference call on Wednesday, he sounded more like a startup founder with no hope of getting funded.

Economic Report: U.S. jobless claims fall by 5,000 to 240,000

Applications for unemployment benefits fell in late July and remained near a 44-year low, highlighting the strength of a U.S. labor market that's show no sign of waning. Initial jobless claims in the period running from July 23 to July 29 declined by 5,000 to a seasonally adjusted 240,000.

Bond Report: Treasury yields dip as traders await jobless claims, services data

U.S. Treasury yields retreated modestly on Thursday as investors await economic reports on employment and the services sectors that could help guide the Federal Reserve's hand as it gears up to normalize monetary policy.

Earnings Summary for Today

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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